If we want to know if the developers are in good shape, look at the results for the listed ones. No developers are immune when the whole market is suffering. Another one has just announced a positive outlook. IJM Corp Bhd’s chief executive officer and managing director Datuk Soam Heng Choon said, “We are quite confident that we will be able to hit this target given the sales we have already achieved in our first half ended September 30 2017. We do see some challenges in making the buyer getting the right financing margin, in the lower end market. That said, we are doing very well with our township sales in Seremban and Cheras.” Their sales target of RM1.6 billion is higher than last year’s RM1.4 billion. So, for the property arm of IJM Corp, it meant that they had a better year for this financial year versus the last one. They are not the only one though. Recently, this happened: Just EcoWorld or is the property market improving? The full article in NST here.
Soam further shared that the group’s property division current unbilled sales amounted to RM1.9 billion, also as of September 2017. IJM Corp’s construction sector is performing extremely well and is now contributing 30 percent to their profits versus 16 percent for the property division. (By the way, 16 percent is still considered high when compared to the many property developers in more advanced property markets, usually the margin is in single digit) He then said something which I think would make their shareholders happy. “That said, property is a very cyclical business and based very much on market demands, while our strategy towards construction is more on quality, rather than quantity. We are lucky to have clinched numerous projects that are of good quality and yields good return to our shareholders.” The full article in NST is here.
Personally, I have not bought any properties from IJM property before but many years before, I ‘forced’ my sister to cancel her booking and to switch over to one of IJM’s Penang project. She has been thanking me since completion because the project which she cancelled was not delivered in the quality promised and the maintenance is deteriorating. As for the project she bought, Summer Place in Penang, it has done extremely well in both prices and maintenance wise. Selling it today would have earned my sister a handsome profit too. There’s little need to speculate on whether the property market is about to collapse. Just look at the results of all the listed property developers. All these are information available to all of us, the occasional property buyers. Happy following and viewing yeah.
written on 20 Jan 2018
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